Integrated Risk Management in Multinational Corporations

  • Lima ZhaoEmail author
  • Arnd Huchzermeier
Part of the EURO Advanced Tutorials on Operational Research book series (EUROATOR)


This chapter synthesizes the conceptual framework and empirical investigation of IRM (integrated risk management). We start by comparing frameworks of IRM and ERM (enterprise risk management). Next, we discuss risk attitudes and objective formulations in quantitative optimization. Finally, we present various risk measures and classify risk management strategies according to their treatment of risk.


  1. Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17, 99–121.CrossRefGoogle Scholar
  2. Carter, J. R., & Vickery, S. K. (1988). Managing volatile exchange rates in international purchasing. Journal of Purchasing Materials Management, 24, 13–20.CrossRefGoogle Scholar
  3. Chapman, R. J. (2006). Simple tools and techniques for enterprise risk management. New Jersey, U.S.A.: Wiley.Google Scholar
  4. Chowdhry, B., & Howe, J. T. B. (1999). Corporate risk management for multinational corporations: Financial and operational hedging policies. European Finance Review, 2, 229–246.CrossRefGoogle Scholar
  5. Cohen, M. A., & Kunreuther, H. (2007). Operations risk management: Overview of Paul Kleindorfer’s contributions. Production and Operations Management, 16, 525–541.CrossRefGoogle Scholar
  6. Ding, Q., Dong, L., & Kouvelis, P. (2007). On the integration of production and financial hedging decisions in global markets. Operations Research, 55, 470–489.CrossRefGoogle Scholar
  7. Ghoshal, S., & Nohria, N. (1993). Horses for courses: Organizational forms for multinational corporations. Sloan Management Review, 34, 23–35.Google Scholar
  8. Kleindorfer, P. R., & Saad, G. H. (2005). Managing disruption risks in supply chain. Production and Operations Management, 14, 53–68.CrossRefGoogle Scholar
  9. Kogut, B., & Kulatilaka, N. (1994). Operating flexibility, global manufacturing, and the option value of a multinational network. Management Science, 40, 123–139.CrossRefGoogle Scholar
  10. Kogut, B., & Zander, U. (1993). Knowledge of the firm and the evolutionary theory of the multinational enterprise. Journal of International Business Studies, 24, 625–645.CrossRefGoogle Scholar
  11. Kouvelis, P. (1999). Global sourcing strategies under exchange rate uncertainty. In S. Tayur, R. Ganeshan, & M. Magazine (Eds.), Quantitative models for supply chain management (pp. 625–668).Dordrecht: Kluwer Academic Publishers.Google Scholar
  12. Lessard, D. R., & Zaheer, S. (1996). Breaking the silos: Distributed knowledge and strategic responses to volatile exchange rates. Strategic Management Journal, 17, 513–533.CrossRefGoogle Scholar
  13. Martinez, J. I., & Jarillo, J. C. (1989). The evolution of research on coordination mechanisms in multinational corporations. Journal of International Business Studies, 20, 489–514.CrossRefGoogle Scholar
  14. Miller, K. (1992). A framework for integrated risk management in international business. Journal of International Business Studies, 23, 311–331.CrossRefGoogle Scholar
  15. Nawrocki, D. (1999). A brief history of downside risk measures. Journal of Investing, 8(3), 9–26.CrossRefGoogle Scholar
  16. Otley, D. (1999). Performance management: A framework for management control system design. Management Accounting Research, 10, 363–382.CrossRefGoogle Scholar
  17. Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: The Free Press.Google Scholar
  18. Rai, A., Patnayakuni, R., & Seth, N. (2006). Firm performance impacts of digitally enabled supply chain integration capabilities. MIS Quarterly, 30, 225–246.CrossRefGoogle Scholar
  19. Schmieder-Ramirez, J., & Mallette, L. (2015). Using the SPELIT analysis technique for organizational transitions. In M. Carmo (Eds.), Education applications and developments (pp. 291–300). Science Press.Google Scholar
  20. Shapiro, A. (2002). International Financial Management. John. Wiley & Sons, London.Google Scholar
  21. Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2003). Designing and managing the supply chain. New York: McGraw-Hill/Irwin.Google Scholar
  22. Sodhi, M., & Tang, C. (2012). Tactical approaches for mitigating supply chain risks: Financial and operational hedging. In M. Sodhi & C. Tang (Eds.) Managing supply chain risk (pp. 109–133). Berlin: Springer.CrossRefGoogle Scholar
  23. Stulz, R. (1996). Rethinking risk management. Journal of Applied Corporate Finance, 9, 8–25.CrossRefGoogle Scholar
  24. The Committee of Sponsoring Organizations of the Treadway Commission [COSO]. (2004). Enterprise risk management integrated framework executive summary, September 2004.Google Scholar
  25. van Mieghem, J. A. (2003). Capacity management, investment and hedging: Review and recent developments. Manufacturing & Service Operations Management, 5, 269–302.CrossRefGoogle Scholar
  26. van Mieghem, J. A. (2012). Risk management and operational hedging: An overview. In P. Kouvelis, L. Dong, O. Boyabatli, & R. Li (Eds.), Handbook of integrated risk management in global supply chains (pp. 13–49). New York: Wiley.Google Scholar
  27. van Mieghem, J. A., & Dada, M. (1999). Price versus production postponement: Capacity and competition. Management Science, 45, 1631–1649.Google Scholar
  28. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5, 171–180.CrossRefGoogle Scholar

Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Associate Professor of Supply Chain Management, Ningbo Supply Chain Innovation Institute ChinaMIT Global SCALE NetworkNingboChina
  2. 2.Chair of Production ManagementWHU-Otto Beisheim School of ManagementVallendarGermany

Personalised recommendations